Question

The theory that higher-income taxpayers should be taxed less because their savings and investments stimulate the economy is known as

Answer 1

The correct answer is: supply side economics.

Step-by-step explanation:

Supply-side economics is a macroeconomic theory which advocates lowering of taxes and decrease in regulation to boost economic growth. It is directly in contrast to demand-side economics.

This theory focuses on reducing taxes, decreasing regulations on producers and declining borrowing rates.

This theory states that economic growth can be stimulated by boosting investments through tax reduction.